CA: Revise Prop. 98 (autopilot spending initiative out-of-control, no longer workable)

Riverside Press-Enterprise ^ | 1/17/05 | Op/Ed

[NormsRevenge]

Gov. Schwarzenegger is right: California will never be able to budget rationally as long as Prop. 98 remains the way it is. His proposed changes to the 1988 initiative, which requires generous annual funding for public schools, may not be workable.

But he's on solid ground in making the suggestion - and sparking a debate over ways to adjust the measure.

The governor has criticized "auto-pilot" spending that keeps increasing even when state revenues slump, and Prop. 98 is the 800-horsepower engine of cruise-control budgeting.

Make no mistake, public education should be a top priority for California. The state for years neglected its schools while trouble festered and learning suffered, and recent reforms aimed at restoring public schools' luster deserve wide support.

But is education so pre-eminent that its funding should automatically escalate every year, at the expense of everything else the state does? Prop. 98 drives education spending continually upward, yet revenues don't always increase. That's policy madness.

Here's how it works: Prop. 98 usually entitles education to the amount it received the prior year with increases for inflation and enrollment. The Legislature can suspend the requirement, as it did this year.

But the state must eventually raise school funding to the level Prop. 98 mandated had the normal formula been used. There's now about a $3.5 billion gap between what schools spent and what they were supposed to receive - and the state must some day fill it.

And if the Legislature gives education more money than Prop. 98 requires, that becomes the new funding floor for the next year - and in perpetuity. That's what happened when the state built huge surpluses during the dot-com boom. The Capitol ramped up Prop. 98 funding, then the revenues dropped away.

California can never budget realistically if spending obligations climb no matter what state revenues do. Schwarzenegger wants to change Prop. 98 so budget writers can no longer suspend it or borrow from it. He'd also scrap the obligation to raise the yearly funding level by the $3.5 billion that comes from past budget actions.

However, those changes would also put Prop. 98 money off limits to future budget cuts. That's a problem, because safeguarding 43 percent of the state's general-fund spending (education's share this year) means that any cuts would fall heavily on other programs - or the state would raise taxes.

Better to revise Prop. 98 to end the auto-pilot spending increases and link school funding to available revenues. Putting extra money into schools in a good year shouldn't oblige the state to provide that same amount forever.

California needs a strong education system, and that takes money. But it's not the state's only priority, and if budget writers are to meet the state's spectrum of financial obligations, they need more flexibility than Prop. 98 allows.

[Grampa Dave]

Prop 98 was the dream of everyone in the California Education rackets.

Prop 98 was and is a nightmare for those of us who pay the taxes for this quagmire of funding.

[Logical me]

You got it right. Remember Prop 98 was approved by the people. California is saturated with CRATS. The compassionate brain dead were peppered with advertisements by the unions and other special interest groups and they believed it.

[goldstategop]

We need to get rid of constitutional spending mandates and give legislators the flexibility to set spending priorities subject to a spending cap of course. That way important programs get fully funded and the rest don't make it. We'll get smaller and more rational government.